What is Proton’s future direction and what can you expect – an interview with its CEO Li Chunrong

In the first year since assuming the role of chief executive officer at Proton, Li Chunrong has focused on various initiatives to bring the national carmaker back to the heights of glory that it once attained. As you’d expect, this isn’t an easy responsibility to undertake.

There are many aspects that demand attention, which have been stipulated in the 10-year plan that has been laid down to bring Proton to the forefront. Among them are two standouts that are clear for all to see: the introduction of the company’s first-ever SUV, the Proton X70 that will be launched soon, and the upgrade of over 100 dealerships to 3S/4S centres this year.

However, behind the scenes of Proton’s operating and brand management, there are other things that have changed. Company policies, long-standing business practices from before, expectations placed on vendors and suppliers, and many more, all have be done to achieve one goal – improving the overall quality of Proton’s product line-up and regaining customer confidence in Proton. And, this is what Proton needs at this point.

To find out more about the planning and ongoing efforts, we had the opportunity to sit down with the man of the hour for an interview recently at the Proton Centre of Excellence. What can we expect from Proton moving forward? We direct the questions to Li himself.

The Proton SUV will be launched soon, with bookings already exceeding 10,000 units up until now. Is this a good development for Proton? What contributed to this warm reception (of the SUV model)?

We began order taking of the X70 first in September this year. At the time, it was conducted only at physical showrooms only. A month later, in October, we started taking online bookings. That was a new method for us, and the first time it has been done in Malaysia by any manufacturer. However, this method is common in China. Looking at the response we received, customer awareness towards the X70 and Proton is now higher.

Once the official launch takes place, will there be units ready to be delivered immediately to customers who made a booking? How will Proton plan to handle this matter considering the X70 is (initially) a CBU model from China?

No, the handover will be done in stages. Once launched, we will make sure the number of units ready is enough to maintain the momentum in the market, balancing between supply and demand accordingly, as well as shortening delivery times. Those who placed their booking early will be given priority. The feedback from the bookings made gives us the advantage to plan the distribution rate of the model for the local market.

The Proton X70 as we know, is a model based on the Geely Boyue. What are the processes required to prepare the model for the Malaysian market?

On the one hand, the X70 isn’t a “rebadged” model as widely understood. Chiefly is the switch from left-hand drive to right-hand drive. This process isn’t as easy as switching seating positions only, as it involves transferring five main vehicle systems, with 20 components that require modifications. About 500 Proton personnel were involved in the project and are currently working at Geely’s plant in China. The time it took to complete the project was one and a half years. Now, the X70 is ready to enter the local market.

Proton previously announced that the locally-assembled (CKD) version of the X70 will be introduced later, replacing the CBU model that is being marketed first after its launch. What are the differences we can expect from the CBU model? Will the new 1.5 litre engine co-developed by Geely and Volvo be offered?

For now, there’s still a lot of work that must be done to ensure the introduction of the X70 CBU runs smoothly. In that regard, we will focus on the matter at hand first. A CKD version is definitely planned, but it isn’t time for us to reveal anything about it. Currently, the X70 is the priority for the market.

Is there a possibility that the X70 will emerge as a seven-seater later?

It isn’t included in our existing plan but it can be considered later. Since the X70’s body design is rather big, it’s not impossible to introduce (a seven-seat version) here, if there is demand from the market.

The naming approach taken with Proton models is completely different starting wit the X70 when compared to previous models like the Saga, Persona, Iriz and others. Will this approach be retained and will the names of existing models be changed as well?

Starting with the X70, the new naming approach for future Proton models will follow this latest method; it becomes like a sign for the transition of Proton’s products. However, for existing models, their names will be retained. This is because many are already familiar with the names, and we have no intention to change them.

After a year as CEO of Proton, what are some of the challenges you’ve faced? Do you understand the intricacies of the market here? Can you share your observations?

The most critical challenge I had to face is the total sales volume of Proton vehicles that have diminished when I joined the company. That’s a very difficult situation. With 30 years of experience in the operation of different automotive industries and my involvement in the joint venture (JV), I’m trying to reestablish Proton’s path.

From my observations, the market here has different demands and is of a much smaller scale compared to China. The prices of cars here are also higher compared to China, and the lifespan of a model is much longer here. So, based on these inputs, Proton will plan its way forward.

Among the goals of Geely’s joint venture is to restore Proton as the leader of the local market. How will this be achieved?

When I took up the responsibility, the Proton-Geely deal included a 10-year plan to be achieved. Indeed, for now, we only the new X70 as the first model to come out of this joint venture.

Recognising the SUV segment as a large and popular one in Malaysia (compared to sedans and compact hatchbacks), Proton will enter segments with potential that it wasn’t represented in before this. Therefore, among the steps taken is to introduce one new model every year, for different segments. This doesn’t include improving existing models, and certainly to increase the annual sales volume of Proton vehicles here.

What about the export market?

In 2017, we exported 248 units. In 2018, around 1,700 units will make their way out of Malaysia. With the support of the Malaysian government, we are targeting to export about 3,000 to 4,000 vehicles over the coming years. This is still being worked on.

One of the key factors to regain customer confidence is improving the quality of products and customer service provided by Proton. How has the development been so far?

As many are aware, Proton is actively upgrading its dealer network to 3S/4S centre. This is for customer satisfaction, and we are close to hitting our target for this year. Secondly, the quality of the product itself. For the whole year I was here, Geely’s internal audit team have been here three times for evaluations.

With the same internal demerit rating system used by Volvo, Proton, which recorded 6,680 points in October 2017, has now reduced the figure to 1,574 points as of October 2018 (higher points earned equals worse). Within a short period of time, this is something we are proud of, as we originally aimed to hit 1,500 points.

How do you deal with the perception that Proton is now a Chinese company, and no longer a company that’s more closely associated with Malaysians?

That’s totally incorrect. If there is any change in this context, Proton hasn’t turned into a Chinese company, but a multinational company. Why do I say that? It’s true that Geely has an interest in Proton but in terms of operation, it is not as you’d expect.

I’ll give you an example. At the Tanjung Malim plant, we have three Japanese engineers who head the operations there. Proton’s chief financial officer is a Canadian national. The design and styling department has British and French individuals who are also involved in providing input. Similarly, a few German and Indian nationals with their respective expertise contribute equally.

Our goal is singular: to improve Proton’s condition and restore it to its respected position as before. All these things we’ve discussed – and many other aspects of course – are the changes that are necessary to achieve that goal.

Originating from the corporate world with a background in finance and economics, Gerard’s strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.

I have to ask Li Chunrong one question….Proton was born in 1985. Geely was born in 1997. So Proton is more senior. Why is Geely teaching Proton?

It is Proton that should be teaching Geely. It is Proton that should be transferring technology to Geely

Why is Geely having so much of success and expertise in car industry when it is 12 years younger than Proton?

Why does Geely make USD$30 billion (RM100 billion) in profits last year and Proton makes RM4 mil in losses per day?

Proton also could have marketed our cars to all over the world and China market as well. Infact, Proton had an advantage. They had the worlds markets and even China to market their cars. Geely only really had China to market their cars.

For declaring a Chinese car as a national car …it’s tantamount to tax evasion… You should be ashamed of yourself Li Chung … Geely didn’t keep their promise to help develop new Proton models but using Proton status to sell China cars

I have One question for this Li Chun person …. Prior to DRB selling Proton …what happened to Geely promise to the Govt to turn Proton around like it did Volvo.. injecting resources to build new models and creation of jobs for Malaysians… But its very obvious now that Proton is being used instead by Geely instead.

As i read this interview … its unbelievable the amount of BS this li chun is coughing out … making it sound like rocket science to change left to right with 500 Proton personnel involved. If li chun really needed 500 then he failed miserably.. when it can be done with 100 or less

Before driving a Proton is like wearing a Casio watch when everyone else wore Swiss watches for status… Today driving a GeelyProton is like wearing a fake casio watch… with zero identity and zero brand

Li Chunrong is one clever dude. Managed to get local car status and local tax privileges just for a mere RM170 million for Proton

Honda, Toyota and Nissan spent tens of billions in Malaysia the past 40 years to establish their brands and earn the right to have local car status and local tax privileges.

Li Chunrong, with just RM170 million got local car status and local tax privileges overnight. What a slap to the Japanese.

What did Proton lose for taking RM170 million?

a) They lost 49.9% of the company. But in reality, they lost more than that because local Malaysians now have ZERO say. China calls all the shots even though DRB has “controlling stake”. We are puppet boneka only.

b) Lost Lotus completely. Not bad, geely now has Lotus for just RM170 million ringgit.

c) Proton lost its RM5 billion land in Shah Alam with a Gross Development Value of RM12 billion.

Previously u talk nonsense but this is one fact which i agree with u. Chinese are clever pipu. They know how to do business. Why would Proton be making a loss? It’s becoz of the lousy CEO they hired due to discrimination. Now they learn their lessons by losing billions in dollars. It’s the same with the Gov, some refuse to change, clinging to the old administration. U can’t progress without change. Just like a cocoon to a butterfly.

john minum teh 8x- we homo sapiens exist for thousand of years and breath the same air and eat and drink from the same earth. so nothing special here. all equal opportunities, right? so the answer to your question is, you buy an air ticket and go to china for a visit and participate in their daily business routines. calculate how much hour and effort they sacrifices. we can only reap what we can sow. no magic trick. it is HARDWORK HARDWORK HARDWORK

I don’t see any problems with Proton learning from Geely. If even orang puteh brand like Volvo with 91 years of history can learn how to rise again from Geely, then why not Proton which is so much younger at 30 years old?

Talking about advantage, Volvo had so much advantages going for it. It was the first luxury brand to expand production overseas and even started in Malaysia long before Proton was an idea. They were at everywhere and yet did not succeed until Geely took over.

I do not see this problem. Every year more and more cars are on the roads, every year record breaking sales everywhere. The roads are jam full with cars. If what you said was true, this would have happened. Yet more and more cars are still being sold, especially luxury brands. Cars are affordable to the working Malaysians, if you can’t afford it, it means you’re not working.

As for Volvo, even Swedes themselves don’t own Volvos so early in their adult lives, it’s not affordable even for them, but they make a conscientious choice to buy Volvos rather than equivalently priced Mercedeses & BMWs.

Proton did not cause hardship. It made cars more affordable for the B40s, it created jobs for hundreds of thousands of locals, it advanced Malaysia from an agricultural country into an industrial one, it created our automotive industry which would not have been able to compete with the early automotive start in Thailand if they had followed, it boosted the technical skills of our labour workforce, more farmers & fishermen children became engineers & specialists, it pushed innovation in local cars, it was the forefront in driving for better safety features in cars sold here, it lowers the death rates amongst car users. With all these, Proton was more of a boon than any bane at all.

My friends and I born in Malaysia same year, 1984, we bought our first house from the same developer, same project at the same time. but he got some special discount, while i don’t have. why both same malaysia, but treatment different different.

Ohh? And how certain about that? Are you ‘confuse’ but with another name? Are you the same troll that uses many names to tell lies? So how can we believe what you said whether as Ahmad or confuse or any other name?

For 20 years we Malaysians suffered with Proton’s debts. Now, we have become a full rebadger. After a while also, Li Chunrong will terminate and tutup kedai for all Proton cars like Saga, Exora, Persona, Ertiga, Suprima and Perdana.

Li will want to market all Geely cars in Malaysia ie rebadged Protons.

So, why did Malaysians suffer the past 30 years? Would not it better we did not even have a P1 and just be an official rebadger for a few car companies in Malaysia?

please get your facts right. the biggest problem with the internet is people posting up incorrect information on the internet and pretending like its the truth. li chunrong works for proton, not geely.. he also doesnt come from geely, but from dong feng honda. if you work for audi, you dont say you work for VW.. likewise if you work for nissan, you dont say you work for renault who owns nissan.. with the x70 in the market, proton will still be selling, persona, saga, exora and preve. these are still 100% homegrown proton models, and not rebadged in any shape and form. proton is now spending millions building a brand new line in tg malim to build the CKD x70.. why would they do that and close down the company? how about perodua then? never ever produced their own car, but also recognised as a full national car with all the same benefits.

Nothing new if you look like auto companies like Daewoo, Holden, Opel, chevrolet, Vauxhall – all under GM. Some models came out as rebadged by respectives company. If Geely can came out with attractive car and globally acceptable Why not? If we still harping for changes without doing the walk the talk… another 1000 years also would not happen.

Dear Mr. Li Chun Rong….. I bet you still didn’t get the whole picture about malaysia’s automotive industry and what Malaysians buyer really want? It’s about the brand and the quality of aftersales that really matters… No matter how you upgrade your branch and dealer to 4S or 10S it will be nothing if the faith in Proton cannot be restored in to Malaysians buyer again….. The attitude of workers in Proton was on one of the main contributions to this never ending problem and the lousy vendor who always failed to produce good parts. What you should do is to total revamp Proton… Kick all the useless morons… And do more marketing all over Malaysia…. Day and night… Get back the trust… And I’m sure you have all the databases of millions existing Proton’s owner who swore never buy Proton again…. Why not start with them… I mean.. Do it like you mean it…. No need to teach right… When you said Perodua is no match of Proton is true because Proton never learn and buck up after being toppled from top industry playmaker… Yeah.. I know easy said then done…. Hey…. That’s the reason why you have been hired to turn around the company…. Handsome paycheck… Many benefits…. Come on… Prove your worth… Don’t let people insult Proton…. If you have pride and dignity.. My 2cents…peace

Tun F, what position you hold in your company…if by any chance you are currently employed. CEO, with the entire team behind his back, see things 5 decades ahead of you la. so just drink your teh tarik and chill.

Geely take over… Proton increase in sales. Main reasons is due to Geely experience and achievement of obtaining other company instead of building its own. Geely obtain/bought share from Volvo, Proton, Lotus, Daimler, Terrafugia and soon many more. From nothing into something. From copier become own build and successful. Proton is totally consider not a failure but failure in management due to cronies which resulting is supply of inferior parts while lack of experience to evolve. Evolving in engine parts is crucial but Proton truly lack of that. Meanwhile design wise is truly below expectation but body of the car has its character. Especially Preve, Savvy, Juara, Waja, Gen-2, Persona and etc. All looks good in body but front and rear end need a better improvement. Well, glad to see Geely has put many effort to turn Proton into its glory day. Good luck!

The proof of the cake is in the eating. It is nice to hear the quality improvements and all, but the real test and proof will come when the X70 hits the road, and the service levels of the so-called 3/4S centres. Have they really gone up?

With a free hand unfettered by a diktator boss, the CEO has alredi began doing so. We can alredi see the improvements within one year where P1 sales satisfaction has overtook P2 and aftersales rose up just 2 points below P2. By the time when X70 is fully on the roads, we can expect P1 to far surpass P2 and aiming for the Jepunis branding image. The journey has only begun but its will be well worth taking.

That’s the difference when there is no meddling by a powerful old man who treated the national car as his child, even when that person was poor in his guidance. Najib helped to unshackle this burden and Proton can finally chart it’s own way whichever it sees best.

Age does not count, although Proton is older than Greely but it was not progressive.
Many workers worked longer in a company but lack of initiatives to learn and improve so other younger workers who take courses to improve and become better and promoted.
It is not easy to turn around a company as there are many factors involved.
I had turned around a company but had to encounter a lot of hindrances like the union protecting non performance staffs.
So it needs time to turn around Proton.
Good example, Malaysian Airlines, a man with great experience and had turned around another airline found the task difficult and gave up.
It is easy to talk but doing it is difficult.

China cars were not build to accommodate RHD models unlike Japanese or European models. Thats why it requires more work to convert existing LHD models to RHD. Meanwhile sales of Boyue is not that satisfactory as it failed to make it to the top 10 best selling cars in China. This is due to complains & issues of the SUV not well addressed by Geely.

I dont mind if buying a rebadged Geely if the price is right , reliable and spare parts are plentiful plus affordable. You people should have a look at Geely’s website and look at their current models. It makes local Toyota and Honda models look 10 years behind time.

Wow talk as if been working in the automotive industry for decades. Where in the heck you guys got all that so called automotive facts? wow..

Proton is a chinese company? since when 49.9% is bigger than 50.1%? No matter how many %, but the most important thing is, no more or little political magic hands intefering with their opertion n decision.

Biggest problem with proton is not about the workers or engineer, – even with limited or small engineer work force they managed to came out cars with safety level far better than some nissan model (tida, datsun go, np300) this was before geely jv. So IMHO back then it was mostly about political magic hands.

You can see with perodua, little political magic hands meddling in their operations/decisions, produce/rebadge good cars in term of finishing quality (compared to proton back then) .

So hopefully with going fully privitized, they can hire who ever they want, rebadge, reengineer what model they choose, as long they can improve proton, can caputure more market for larger sales volume domestic or foreign and produce more good cars with good bargain for malaysian..

While tired of waiting X70 price release, I finally just went ahead for the super final facelift edition Alza, as its price point is actually very hard to beat and cheap maintenance; and more so probably X70 won’t be able to beat this price as well.

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